A gathered panel of T+1 experts at the FIX EMEA Trading conference were in agreement about the inevitability of an eventual further shift in settlement times and, appeared cautiously optimistic that firms are for the most part sufficiently aware of the need to innovate.
However, with the need to innovate across the board more pertinent than ever before, experts advised firms to move not just with the times, but ahead of the times.
“This is an evolutionary event. T+1 is not an end in itself, it’s a stop on the road to real time settlement. You will not get to real time settlement from where you are now without doing something pretty dramatic in your back-office,” asserted one expert panellist.
Another speaker added: “Think about T+0 as your goal and build a solution for that which you throttle back for a T+1 environment. You can operate a T+1 system within a T+2 environment, just as you can operate a T+0 environment within a market operating in T+1 […] It’s a choice. Do you want to evolve, or do you want to go extinct?”
Read more: UK confirms October 2027 alignment with EU and Switzerland for T+1 transition
Asked about the biggest pain points around T+1 implementation across Europe, 48% of the gathered delegate highlighted EU post-trade fragmentation as the number one concern, closely followed by cost and budget implications of tech/automation investment (40%).
The panel affirmed that this result was no surprise, with one commenting that it is more than anything an operating model challenge, in particular for Continental Europe, and smaller firms without a global presence that can accommodate workflows outside of normal operating hours.
“The challenge of post-trade fragmentation means that concern will be about failed trades and inability to potentially fund those traders as well. When we look at the UK, it seems pretty straightforward, there’s two and a half years to look at it. But the EU being 27 different countries is where the industry is most concerned about divergence from the timetable”.
Read more: Inside the UK’s blueprint for the move to T+1 settlement
All in all, the message is clear – adapt or get left behind amid increasing global alignment. With the US shift to T+1 relatively painless in the end, the road appears clear for Europe to follow suit, but as the experts continue to assert, ultimately this is a different beast.
“The emphasis here is that we’re looking at the future. We’re not looking at the mistakes that might have been made, we’re not looking at the journey that’s already happened. We’re looking at where we go from here.”